The introduction of a hydrophobic moiety on chitosan enhances the self-assembling properties, mucoadhesion, the permeability of the macromolecule and aids in target specific delivery. Our group synthesized a hydrophobic trans N-(6,6-Dimethyl-2-hepten-4-ynyl)chitosan derivative (CSD) and studied the surface modification of ZnS nanoparticles in a single pot reaction. X-ray diffraction studies and FESEM imaging confirms the nano size and morphology of the surface modified Zinc sulfide nanoparticles (ZnS-CSD NPs). The proposed ZnS-CSD NPs showed excellent emission at 457 nm. Photostability studies indicate that the surface modified ZnS-CSD NPs possess better photostability than Rhodamine B and FITC. Cell viability tests confirmed the biocompatibility of the modified nanoparticles. All these features of ZnS- CSD NPs makes these candidates an excellent choice in a wide range of in vitro or in vivo studies as fluorescent biological labels.